Do you want to outsource to China but aren’t sure what the average salary in China is?
China has lower average salary figures compared to other developed economies like the United States and Japan. The annual average wage of a typical Chinese employee is around 3,51,600 Yuan (USD 54,422).
This Article Covers:
(Click on a link below to jump to a specific section)
- What is the Average Salary in China?
- Salary Comparison by Experience, Education, and City
- Legal Provisions For Employment and Wages
- Top 3 Industries to Outsource to China
- 3 Key Advantages of Outsourcing to China
Let’s get started.
What is the Average Salary in China?
The average salary in China differs across cities and provinces. Chinese cities like Beijing, Guangzhou, Shanghai, Tianjin, Shenzhen, and Hangzhou offer higher wages than other cities.
The average salary also depends on several factors like education, industry domain, experience level, and sector (the public and private sectors).
In China, the average monthly salary is 29,300 Yuan (Chinese Yuan), equating to USD 4,534 (US dollars) per month according to the exchange rate in July 2021.
Note: Renminbi (abbreviated RMB) is the official currency of China. However, we will stick to the Chinese Yuan (CNY), which is the popular, international name for the money, in this article.
Now, let’s look at the numerous aspects of the average salary in China.
1. Median Salary
The median salary in China is 31,100 Yuan (USD 4,813) per month.
That means half of the population draws an average income less than the median salary. In contrast, the other half earns more than the median salary. And generally speaking, the economic development of the country is directly proportional to the number of people making more than the median salary.
2. Maximum and Minimum Salary Range
The average salary in China ranges from 7,410 Yuan per month (USD 1,145) to 1,31,000 Yuan (USD 20,245) per month — with 7,410 Yuan being the minimum salary and 1,31,100 Yuan being the maximum salary.
3. Average Annual Salary Increase
Chinese employees are likely to observe a salary raise of approximately 9% every 15 months, depending on the job title.
Although the term “annual salary” implies a salary increment every 12 months, it’s not always the case. The frequency of the salary increment differs from company to company.
A. Average Annual Increase by Industry
Here is the average annual growth rate in salaries across different industries:
|Industry||Average Annual Increment|
B. Average Annual Increase by Experience
The salary level of an employee increases gradually by gaining more experience.
Let’s look into the average annual increase in salaries by experience level:
|Experience Level||Average Annual Increment|
|Junior Level||3% – 5%|
|Mid Career||6% – 9%|
|Senior Level||10% – 15%|
|Top Management||15% – 20%|
Note: The figures provided here are averages of numbers and should only be taken as general guidelines. Salaries and increments will vary from person to person and depend on the factors mentioned above.
4. Minimum Wage
In China, the local government decides the minimum salary rates. It depends on the cost of living, local wages, and the supply and demand of labor in that area.
Due to these reasons, there’s a considerable variation in minimum wages across all major and minor cities.
Employees in Shanghai earn the highest average monthly wage, approximately 2,480 Yuan. Shanghai has roughly double the minimum wages compared to smaller cities in provinces like Hunan, Hubei, Liaoning, and Heilongjiang.
According to China’s National Bureau of Statistics, its total labor force stood at 805.7 million in 2019. Despite the high population, China manages to create around 13 million jobs each year in urban China.
China’s middle-class population is huge, making it difficult for the government to regulate the minimum wage law in each state.
For that reason, China’s Minimum Wage Regulations (CMWR) stated that regional governments should increase the minimum wage promptly and at least once every two years. The minimum wage rule is to ensure that the disposable income is enough to sustain a comfortable lifestyle.
Salary Comparison by Experience, Education, and City
The average salary of an employee in China varies greatly. Here’s the breakout of the salary comparison by experience, education, and city.
1. Experience Level
Understandably, a person’s salary increases with experience. In China, an employee with 2-5 years of experience earns a 32% higher wage than juniors across all industries.
Working professionals with more than five years of experience earn 36% more salary than those with less than five years of experience. On average, a person’s average wage doubles once they hit the ten-year experience mark.
Here’s a salary comparison table by experience level
|Years of Experience||Salary Increase (annually)|
|< 2 years||Base salary|
|2 to 5||+ 32%|
|5 to 10||+ 36%|
|10 to 15||+ 21%|
|15 to 20||+ 14%|
The salary change based on education also varies significantly from one location to another. However, the data displayed here is the combined average of multiple jobs.
For starters, an ESL teacher (English as a Second language teacher) in Shanghai earns an average salary of 15,952 Yuan.
Professionals with a diploma certificate earn 17% more than those who only finished high school. Additionally, employees with a Bachelor’s degree make 24% more than diploma holders.
Moreover, Master’s degree holders make 29% more than Bachelor degree holders. And if a Chinese employee is a Ph.D. holder, they’ll earn 23% more than a person with a Master’s degree.
Yantai offers the highest average salary of around 5,39,175 Yuan per year, followed by Suzhou, Keelung, and Shanghai.
Here’s a list of cities with the highest salaries in China.
Legal Provisions For Employment and Wages
The Chinese government has put together a comprehensive legal framework to protect the rights of employees and increase their income.
The 1995 Labor Law and the 2008 Labor Contract Law (amended in 2013) contain provisions for wages, working hours, employee contracts, benefits, and contract termination.
Here are some of the legal provisions for employment and wages in China:
- Employers need to reach a written agreement with their employees, which both parties need to sign (Labor Contract Law Article 10).
- The employer should specify the agreement terms, place of work, average hourly wage, leaves, labor remuneration, work safety protection, etc. (Article 17 in Labor Contract Law).
- China has 40 hours of standard working hours and two weekly days off. Under the State Council 1995 Provisions, flexible working hours are granted.
- Employers shall pay overtime to the employees if they exceed standard working hours. Additionally, employers cannot force employees to work overtime for more than three hours a day or 36 hours/month (Article 41 in Labor Law).
- The overtime stipend should be more than 150% of an employee’s wages during workdays, 200% on day-offs, and 300% on national holidays, such as the Chinese New Year (Article 44 in Labor Law).
- Employers shall pay the wages to the employee (both blue-collar and white-collar workers) every month. Employers should not delay salary payments without any rightful reason (Article 50 in Labor Law ).
- The employer cannot refuse paid leaves to the employee during statutory holidays, marriage, or funerals (Article 51 in Labor Law ).
- During an employee’s contract termination, they are entitled to a compensation payment based on the number of years employed at a monthly salary rate (Article 47 in Labor Contract Law).
Top 3 Industries to Outsource to China
Thousands of companies outsource parts of their business operations to China.
Here’s a brief overview of all the industries outsourced to China:
For the past few decades, foreign companies have enjoyed the benefits of low-cost manufacturing delivered by the Chinese industries.
According to a salary survey in 2018, a factory worker’s salary in China is USD 5.51 per hour. Compared with other economic superpowers like the US and Germany, China is one of the most inexpensive countries in terms of labor costs.
Companies like Apple and Nike benefit from China’s low hourly wage, lower real estate costs, and the unbeatable supply chain by setting up factories in the country.
2. Software Development/IT
China has one of the most vibrant startup ecosystems globally and is home to many high-growth IT companies. The Chinese education system produces 4.7 million tech graduates each year.
The average salary of a software developer in China is 1,89,000 Yuan to 3,57,000 Yuan. The low wage makes it easier for outsourcing companies to hire quality software developers at a low rate.
3. Customer Service
If you have Mandarin or Cantonese-speaking customers, outsourcing your customer service operations to China may prove beneficial for your business.
The average salary of a call center agent in China is USD 31,283 annually. That makes it easier for companies with Mandarin customers to outsource their customer support needs.
3 Key Advantages of Outsourcing to China
From competitive wages to a stream of graduates with advanced technical skills, outsourcing to China has many advantages. Here are a few of them:
1. Government Support
Since 2005, the government of China has moved the emphasis from hardware production to IT development since their 11th Five-year plan (2006-2010).
The Ministry of Commerce, People’s Republic of China (MOFCOM) devised a “1,000-100-10” plan.
The project aims to increase China’s share in services exports by:
- Establishing 10 Chinese cities as outsourcing bases.
- Attracting 100 international corporate customers offshore in these cities.
- Developing 1,000 large and medium-sized outsourcing vendors.
They have also added a framework to protect intellectual property rights (IPR) and improve the infrastructure of the outsourcing industry. Additionally, there are various income tax rebates to encourage development outside key outsourcing centers.
2. Abundant Human Resources
One of China’s strengths is its vast talent pool of skilled technicians and engineers.
According to the World Economic Forum, China produced 4.7 million STEM graduates in the year 2017.
Additionally, Chinese students returning home with degrees from top schools in the United States, Europe, and the UK contribute to the country’s high-quality talent pool.
3. Access to Vast Consumer Base
If you plan to expand your products overseas, especially in Asian countries, outsourcing to China can be really helpful.
China has a massive consumer base of more than 1.3 billion people, and that will guarantee a healthy return on your investment.
Since China shares borders with other big countries like India and Vietnam, you can easily export your products to these countries.
Check out our detailed guide on outsourcing to China for more information.
The low average salary in China makes it the perfect option to fulfill all your outsourcing needs.
With a manufacturing infrastructure second to none, and the availability of skilled individuals, it’s hard to go wrong when outsourcing to China.
Use the data we’ve provided here to estimate the average salary of a Chinese employee and decide if outsourcing is the right choice for your business.
Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.